Senate cuts spending proposal in effort to speed adjournment

Positions on &#8216;contingency&#8217; language harden, however

A Senate committee Friday trimmed $200 million in proposed Alaska school projects, including four in Juneau, from the state’s capital budget to make it more palatable to Gov. Sean Parnell and leaders of the House of Representatives.

That move, along with the removal of a controversial “trigger” provision in the budget, is intended to help bridge a budget deadlock that has led to a special session of the Alaska Legislature, said Sen. Bert Stedman, co-chair of the Senate Finance Committee.

The Senate, however, also quietly made a technical change to its version of the capital budget bill that toughens its position.

The biggest change to the budget was cutting out dozens of school major maintenance projects. That was the first major change since the House, backed by Parnell, reached an impasse with the Senate weeks ago.

The Senate had previously proposed spending enough to accomplish the state’s entire major maintenance list in the next year. The plan released Friday cuts 84 schools, including four in Juneau, from the renovations to be done this year, said Miles Baker, a finance committee aide to Stedman.

Remaining in the budget are 33 schools at a cost of $73 million.

Despite the loss of the Juneau school projects from the proposed budget, there are still $74 million in Juneau projects in the budget.

“I think we did well,” said Sen. Dennis Egan, D-Juneau.

The Juneau school projects are less critical needs than the ones that will be funded, and will rank higher for future funding.

“There’s always next year,” Egan said.

The reduction in the proposed budget will enable House members to write into the budget projects sought for their districts, without spending more than the $2.8 billion Parnell said he’d find acceptable.

“Clearly, we’ve got to leave room for the House to add their projects,” Stedman said.

“It was one of the things that were hampering the end of session,” said Egan, a member of the Finance Committee.

The current Senate budget proposal, at $2.68 billion, does that, Stedman said, while also benefitting the state’s economy.

The Senate’s capital budget will “move the state forward, build our infrastructure, and push the jobs that are needed around the state,” Stedman said.

The new proposal also eliminated the “oil price trigger,” a list of projects that would only be funded if oil prices reached $150 a barrel.

Another controversial provision, contingency language that grouped about $400 million in energy projects together, remains.

That’s an attempt to block Parnell from using his line-item veto to retaliate against those who wouldn’t pass the oil tax cuts sought by the industry.

Rep. Beth Kerttula, D-Juneau and House Democratic leader, said Parnell was responsible for that contingency provision being in the Senate budget.

“The Senate obviously reacted to the governor’s threat of a veto if they don’t pass his huge tax reduction for the oil companies,” she said.

Parnell spokesperson Sharon Leighow didn’t respond to an email. Chenault praised the Senate for removing the oil price trigger provision, but said the contingency language needed to be removed as well.

“They’ve moved off some of their language, but we’re hoping they’ll move some more,” he said Friday.

Stedman said he believed the contingency provision is needed, and is constitutional.

“The contingency language is good language,” he said.”

The other change made in the capital budget released Friday was to include a non-severability clause in the group of any projects.

That clause is insurance for the Senate, and says that if the contingency language is found to be invalid the entire energy projects section of the bill is eliminated. It appears intended to strengthen the Senate’s hand in negotiations with Parnell.

It is lined to a group of $400 million senators fear may be at risk of being vetoed.

Stedman and other senators said they expected to continue negotiations over the weekend now that there were new budget drafts to discuss.

“We expect continued dialogue on an adjournment package,” Stedman said.